Broker Check

Financial Planning Before Year End 2018

| December 13, 2018

At Windsor Wealth Management, we believe the best financial outcomes are achieved through coordination with your tax, legal and financial advisors. That said, sometimes life gets in the way. So, we have prepared a list of financial topics to consider before the end of the year.  If you haven’t already, please discuss these topics with your CPA and we can help you with implementation.

  1.  Charitable giving

While giving to charities is driven by personal values, it pays to also be mindful of the tax benefits.  The new tax law that became effective in 2018 doubled the standard deduction to $12,000 for single filers and $24,000 for married couples.  As a result, it may make sense to look at your charitable giving over multiple years. 

If you are not already doing so, consider utilizing a donor-advised fund. A donor-advised fund can be thought of as a charitable investment account.  Contributions made with either cash or appreciated securities provide an immediate deduction to the donor. Then those funds can be invested for tax-free growth and eventually disbursed to an IRS-qualified public charity over time or all at once.

Funding multiple years of intended charitable gifts into a donor-advised fund in a single year could help maximize the tax benefit. That said, how charitable giving interacts with your other deductions and overall tax situation requires careful consideration with your tax advisors.  Finally, with the stock market still near a 10-year high, an opportunity exists to use appreciated securities to fund gifts rather than using cash to avoid capital gains.

  1.  Use care if tapping 529 plans to pay for private education before college

College savings accounts or 529 plans offer tax-free earnings growth and tax-free withdrawals when the funds are used to pay for “qualified expenses”.  The new tax law allows families to use 529 plans to pay for up to $10,000 in tuition expenses at elementary or secondary public, private or parochial schools effective January 1, 2018.

While the Federal Law allows using a 529 Plan to pay from educational expenses pre-college, not all state laws have caught up.  This means a state tax benefit you may have received in the past could be compromised or recaptured. For example, New York state has yet to provide clarity on how they would treat these types of withdrawals from a 529 plan.  In Indiana, all grandfathered 529 funds can be used for either k-12 or college.  New contributions will be specifically allocated into k-12 or college.  For further information, visit the 529 plan website for your specific state or reach out to us directly.

It’s important to remember that these state tax breaks are only available when the funds are withdrawn to pay for expenses that the state considers qualified, which may or may not include K-12 tuition. States are currently reviewing the impact of the federal tax change to determine whether updates to state legislation are required.

  1.  Create clarity around your spending

In many cases, regardless of the size of someone’s investment portfolio, many desire to have a better handle on how much they spend.  This is especially top of mind during the holiday season.

We recommend reducing the work of tracking spending by using technology to automate downloading, tracking and classifying purchases.  This can easily take information from multiple credit cards and banking accounts and organize into useful information about spending. Our financial planning software is available to you through a client portal which provides automated expense tracking. 

Accurate spending information is an important input to determine whether someone can be highly confident that they can live their life the way they intend, and that their portfolio will last.

  1. Examine interest rates on your deposit accounts

While the Federal Reserve has been increasing short term interest rates to over 2% as of late, many of the nation’s largest banks and some money market providers are still paying interest rates between 0.01%-0.40%.  Several options are available to increase your yield without sacrificing safety or access to those funds.


While this is not a complete list of items to check off at the end of the year, they do give you a start.  If you would like to discuss any of these or additional end-of-year planning strategies, send us an email at